Ukrainian prices could fall in July and August due to an anticipated good harvest, Deputy Economy Minister Anatoly Maksyuta said on Thursday, according to Reuters.
"I think during the summer months, we could see even deflation if there is a good harvest. Usually, when the harvest begins the food prices fall," Maksyuta said on the sidelines of an economic forum.
Food staples make up some 50-60 percent of the consumer price index and in recent years the country, once known as the "breadbasket" of the former Soviet Union, has experienced summer deflation even though year-end inflation finished at 10 percent or more. Inflation soared to 16.6 percent in 2007 after the worst drought in half a century destroyed crops. Some analysts say high monthly price rises this year reflect momentum gathered last year rather than any fundamental factors.
Inflation in February was 2.2 percent month-on-month, slowing slightly from 2.9 percent in January. Cumulative price rises in the first two months stand at 5.7 percent, but the government has kept to its 2008 inflation forecast of just 9.6 percent.
The agriculture ministry and experts have predicted a strong grain harvest of up to 40 million tonnes, versus 29.3 million tonnes last year.
Excluding 2007, the consumer price index has been either flat or down in July and August in the past 5 years when full year inflation ranged between 8.2 percent and 12.3 percent.
